Big relief for JSW Steel: Supreme Court orders status quo on liquidation of Bhushan Power

Big Relief for JSW Steel: Supreme Court Orders Status Quo on Bhushan Power Liquidation


Introduction

In a significant development, the Supreme Court of India has ordered a status quo on the liquidation proceedings of Bhushan Power and Steel Ltd (BPSL). This decision comes after JSW Steel's plea to halt the ongoing liquidation process, providing a temporary reprieve for the Sajjan Jindal-led company.


Background

On May 2, 2025, the Supreme Court had quashed JSW Steel's ₹19,700 crore resolution plan for BPSL, deeming it "illegal" and ordering the company's liquidation. The court cited violations of the Insolvency and Bankruptcy Code (IBC), including the use of a mix of equity and optionally convertible debentures (OCDs) to fund the takeover, instead of equity alone. Additionally, the court found that the resolution plan was not implemented within the stipulated timeline, leading to its rejection.


Recent Supreme Court Ruling

Following JSW Steel's appeal, the Supreme Court has now ordered a status quo on the liquidation proceedings. This means that the liquidation process initiated by the National Company Law Tribunal (NCLT) is temporarily halted. The court's decision allows JSW Steel and BPSL's creditors to file a review petition challenging the earlier ruling.


Implications for JSW Steel

This latest development provides JSW Steel with an opportunity to resolve the issues surrounding BPSL's acquisition. The company can now explore legal avenues to address the concerns raised by the Supreme Court and work towards a resolution that aligns with the provisions of the IBC.


Statements from JSW Steel

JSW Steel has expressed its commitment to resolving the matter in accordance with the law. The company is actively evaluating its legal options and is hopeful that the review petition will lead to a favorable outcome.


Market Reaction

Following the Supreme Court's latest order, JSW Steel's stock saw a positive movement, reflecting investor optimism regarding the potential resolution of the issue.


Conclusion

The Supreme Court's decision to order a status quo on the liquidation of Bhushan Power and Steel Ltd offers a temporary relief to JSW Steel. The company now has the opportunity to address the legal challenges and work towards a resolution that complies with the Insolvency and Bankruptcy Code.

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Frequently Asked Questions (FAQ)

Q1: What does the Supreme Court's status quo order mean for JSW Steel?
The status quo order temporarily halts the liquidation proceedings of Bhushan Power and Steel Ltd, allowing JSW Steel to explore legal avenues to resolve the issues surrounding the acquisition.

Q2: Why did the Supreme Court quash JSW Steel's resolution plan?
The court found that the resolution plan violated the Insolvency and Bankruptcy Code, including the use of a mix of equity and optionally convertible debentures instead of equity alone, and failure to implement the plan within the stipulated timeline.

Q3: What are the next steps for JSW Steel?
JSW Steel plans to file a review petition challenging the Supreme Court's earlier ruling and is evaluating its legal options to address the concerns raised by the court.


Q4: How has the market reacted to the Supreme Court's latest order?
Following the status quo order, JSW Steel's stock experienced a positive movement, indicating investor optimism regarding the potential resolution of the issue.

Q5: What is the significance of this development?
The Supreme Court's decision provides JSW Steel with an opportunity to resolve the legal challenges surrounding the acquisition of Bhushan Power and Steel Ltd, which could have significant implications for the company's growth and the steel industry.

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JSW Steel, Supreme Court, Bhushan Power and Steel Ltd, liquidation proceedings, Insolvency and Bankruptcy Code, resolution plan, status quo order, legal options, market reaction, Sajjan Jindal

Published on : May 26, 2025 

Uploaded by : PAVAN